So what is the "fair market value" of a mortgage? Consider that immediately on sale, the mortgage contract was bundled by the bank and sold as part of a bundle

So what is the "fair market value" of a mortgage? Consider that immediately on sale, the mortgage contract was bundled by the bank and sold as part of a bundle of similar mortgages, and the bundle has perhaps been split, recombined, and resold multiple times since, its relationship to the actual real property has become somewhat tenuous -- or rather, even more tenuous than it was when it was created in an inflated market. So what's the "fair market value" of that piece of paper? You assume it "is on track to be repaid" but that is a highly optimistic evaluation. The note represents a net future value of payments multiplied by a probability P that it _will_ be repaid. P is considerably less than 1.0 for a note whose face value is more than the present value of the property, and it shrinks every time another house in the same neighborhood is foreclosed or abandoned. At best the value of the note is the sale value of the foreclosed home (less the not inconsiderable costs of performing a foreclosure and prepping the property for resale) -- and the sale value of an abandoned foreclosed house in a city full foreclosed houses is a fraction of the original purchase price. Frankly if Wells Fargo can get $150K for a $200K mortgage in Richmond, they ought to take the money and run.